EA Goes Hostile: Grand Theft Take-Two

After
getting jilted by Take-Two (TTWO), EA (ERTS) has now gone hostile
by
extending a tender offer to Take-Two shareholders for $26 a
share, the same price as the original unsolicited bid. The offer
will expire April 11, a day after the Take-Two shareholder
meeting.

Take-Two's line is that the offer is both too low and
"comes at absolutely the wrong
time", because the stock is bound to shoot up at the end of
April, when the newest Grand Theft Auto game goes on sale. But
TTWO has already been talking up the game's prospects -- earlier
this week, it
raised guidance based on strong pre-sale orders for the game
-- and shares still haven't climbed back above the $26 ERTS
offered last month.

Meanwhile Oppenheimer and Fidelity, Take-Two's two largest
shareholders, have
sold off much of their stakes in the company. What's next? A
game of chicken: The WSJ cites analysts who predict ERTS will
eventually walk away from the offer, in the hopes that shares
will drop even lower -- and then come back to the table. That
sounds plausible to us.